The slightly modified R&D Tax Credit Bill has been released this morning: Tax Laws Amendment (Research and Development) Bill 2010

We are working through the R&D Tax Credit Bill and the accompanying Explanatory Mamorandum and will provide further information shortly. The Bill also contains transitional provisions that ensure that activities and expenditures relating to the existing R&D Tax Concession can be claimed from July 1, 2010.

However, the following points should still be looked at more closely and reconsidered to ensure smooth transition to the new R&D Tax Credit regime:

- Minor changes to the object clause

- Start date is still July 1, 2010

- Differences between core and supporting R&D with no changes to the March – July Bill

- Complicated and far reaching dominant purpose rule for supporting activities

- Complicated and limiting feedstock calculation

- Far reaching “integrity rules”

- Requirement to differentiate between core and supporting R&D activities in registration documents and government’s ability to make variations to the registration based on its own internal review of these registration documents.

We urge  the decision makers to reconsider above points to ensure a smooth transition to the new R&D Tax Credit regime and a successful implementation of the industry policy.

Further update as at October 1:

See here for the benefits of the proposed R&D Tax Credit.

See here for the government’s media release “Introduction of the R&D Tax Credit”.

Apart from minor changes to the object clause, no other changes were included in the proposed R&D TAx Credit legislation.